Keith you are 100% correct. I would be happy to forgo divs and do more buy backs.
The Maths is simple
For demonstration purposes only.
Year 1
Market Cap $5B
SOI 1B
Therefore stock is $5.00
assume Profit $5B
Say we buy back 50%. Cost is $2.5B. and 2.5B in free cash ( $2.50 per share)
Year 2 and beyond
SOI 500M
assume Profit $5B
Profit per share is now $10.00 per share.
Ceteris Paribus the $10.00 per share is in perpetuity.
Then as a margin of safety does it really mater if the Coal price is only 200 per tonne. You are still making do much money.
Capital Management 101
If a company cant find an investment that is better than its own Return on capital then Buy back more of your company.
Check my math's as I have had 3 X single malts, but you should get drift.
Cheers
Crash
- Forums
- ASX - By Stock
- Target $9.36
Keith you are 100% correct. I would be happy to forgo divs and...
-
- There are more pages in this discussion • 1,569 more messages in this thread...
You’re viewing a single post only. To view the entire thread just sign in or Join Now (FREE)
Featured News
Add WHC (ASX) to my watchlist
|
|||||
Last
$7.65 |
Change
0.020(0.26%) |
Mkt cap ! $6.399B |
Open | High | Low | Value | Volume |
$7.69 | $7.71 | $7.64 | $24.66M | 3.217M |
Buyers (Bids)
No. | Vol. | Price($) |
---|---|---|
5 | 22151 | $7.64 |
Sellers (Offers)
Price($) | Vol. | No. |
---|---|---|
$7.66 | 12306 | 2 |
View Market Depth
No. | Vol. | Price($) |
---|---|---|
1 | 5000 | 7.640 |
5 | 3080 | 7.630 |
1 | 1000 | 7.620 |
2 | 2065 | 7.610 |
2 | 11000 | 7.600 |
Price($) | Vol. | No. |
---|---|---|
7.670 | 9000 | 1 |
7.680 | 7000 | 2 |
7.690 | 5500 | 3 |
7.700 | 24000 | 3 |
7.740 | 5000 | 1 |
Last trade - 16.10pm 28/06/2024 (20 minute delay) ? |
Featured News
WHC (ASX) Chart |
The Watchlist
LU7
LITHIUM UNIVERSE LIMITED
Alex Hanly, CEO
Alex Hanly
CEO
SPONSORED BY The Market Online